Government partly responsible for high farm prices: FAO

WINDHOEK: Government has to some extent been responsible for the high prices of farms in Namibia.

This is according to the latest agricultural land price study issued by the Food and Agriculture Organisation of the United Nations (FAO) on Tuesday.

FAO consultant Fleefort Muzyamba said during a stakeholders’ consultative workshop on agricultural land prices’ study organised by the Ministry of Lands and Resettlement here that this is because Government has voluntarily accepted price offers.

“Government… has voluntarily accepted the price offers, and purchased these expensive farms. The government decided to accelerate the purchase of farms at prices even higher than what Government valuers had estimated. The effect is that this resulted in sharp increases in farm prices to high levels,” he charged.

Prior to 2004, Government budgeted an amount of N.dollars 20 million per annum to purchase farms.

After 2004, the budget was increased to N.dollars 50 million per annum. Furthermore, amounts of approximately N.dollars 20 million per annum collected in land taxes began to be deposited into the Land Acquisition and Development Fund from 2005 onwards, and was available for the purchase of farms.

However, due to the slow pace of land acquisition, the funds accumulated in the Land Acquisition and Development Fund.

This build-up of large monetary resources made it possible for Government to buy farms at high prices from 2008 onwards before such funds were exhausted in 2010/11.

According to Muzyamba, the exhaustion of these funds led to the suspension of the purchasing of farms in the less-productive regions of //Karas and Hardap, and prices began to drop in these areas.

The FAO consultant also raised a concern that the valuation profession in Namibia is not well-developed, with farmers in particular receiving little or no professional advice in this regard.

Another concern is that the Directorate of Valuation and Estate Management within the Lands Ministry is not at its full strength, and there is no uniform valuation methodology or standards to which farmers, Government or the Agricultural Bank of Namibia (Agribank) subscribe.

In addition, valuation inconsistencies and variations when tracking market transactions due to weak institutional capacity have added an extra dimension to the problem, Muzyamba noted.

“This lack of consistency, along with the dependency of the market upon Government’s and Agribank’s valuations, emphasises the need for valuation and other land administration activities to be undertaken at an optimal level. Yet, research undertaken during this study indicates that these institutions are operating sub-optimally. Consequently, there is an urgent need for institutional capacity-building,” he stressed.